Ideal Auto released its financial report and achieved profitability for the first time, with revenue increasing by 65% ​​in the fourth quarter

Li Auto, one of the new Chinese car makers, reported a net profit of RMB 107.5 million in the fourth quarter of 2020, as its revenue growth in the Chinese market offset the high production costs. Li Auto is the first of the three new car makers to release financial reports. NIO and Xpeng Motors will release financial reports on March 1 and March 8, respectively. In addition to revenue, investors will also pay attention to funding needs, gross profit margins, chip shortages and overall demand for electric vehicles.

Before the financial report was released, four analysts expected Ideal Auto's quarterly performance to be a loss of 125 million yuan. Ideal Auto's loss in the third quarter was 107 million.

In the announcement, Ideal Auto stated that its revenue in the fourth quarter increased by 65% ​​to 4.15 billion yuan, and its vehicle deliveries increased by 67% month-on-month to 14,464 units. Its annual revenue was 9.461 billion yuan, a significant increase from 284 million yuan in 2019. Its gross profit margin was 17.5%, a slight decrease from 19.8% in the third quarter.

Ideal Auto only sells one extended-range SUV model, namely Ideal ONE. Its total sales in 2020 were 32,624 units. Its deliveries in January this year increased by 356% year-on-year to 5,379 units, lower than NIO's 7,225 units.

According to an internal memo from Ideal Auto, it expects the Chinese electric vehicle market to reach 8 million units by 2025, and the company expects to gain 20% of the market share. However, although the Chinese government has been strongly supporting the development of electric vehicles, related policies and consumer subsidies have also disrupted the market, and automakers still need to work hard to boost sales momentum.

Li Auto's shares closed up 6.3% on Wednesday. The stock has risen nearly 150% over the past year.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.